CommVault Tuesday night reported revenue of $60.2 million last quarter, up 10% year over year and 7% over the previous quarter. The revenue was also greater than financial analysts expected following two disappointing quarters from CommVault.

Hammer said nearly 400 customers have licensed CommVault's block-level deduplication since it became available in
Simpana 8 last January. CommVault has added just over 600 total customers since then.

However, the deduplication market changed last month when EMC Corp. acquired Data Domain Inc. for $2.1 billion, bringing together CommVault's two largest deduplication competitors. Hammer said CommVault competes mostly with EMC's Avamar on the lower end and Data Domain in the data center in deduplication.

"EMC is a formidable company and Data Domain has good products," he said. "We'll just have to compete against it. We're confident we can succeed in that area.

Hammer said CommVault probably would have been in a better position if NetApp acquired Data Domain instead of EMC. "EMC is the 800-pound gorilla," he said. "It has a bigger footprint, so it may be tougher for us. Data Domain is the best-in-class deduplication appliance. Put them together and you have a formidable opponent you cannot ignore. But I think the market will go through a rapid transition, and I think deduplication requires a platform approach versus point-level solutions."

He said CommVault's advantage is it takes an "end to end approach [to deduplication]; we can manage from the source or at the target" and dedupes data to tape.

Symantec is also poised to extend its deduplication footprint by expanding the capabilities of its PureDisk deduplication software and integrating it into its Veritas NetBackup and Backup Exec products.

"Our win rate has been exceptionally high in deduplication," Hammer said. "We've won almost every deal when we've competed against Data Domain in the market."

As for Symantec's PureDisk deduplication, Hammer said, "It's there, but we see much more competition coming from Data Domain and Avamar in that area."

IT spending improves

Hammer said enterprise budgets loosened last quarter, and that continued into July as the current quarter began.

"People are spending again," Hammer said. "I won't call it normal yet, but it's more predictable spending versus what it was in March. Also, there was a return to more normalized spending in the U.S. government, which had been locked up with the spending bill and change in administration [in the previous quarter]."

CommVault still has challenges ahead and Stifel Nicolaus equity research analyst Aaron Rakers noticed that despite positive results, CommVault did not provide a forecast for this quarter.

"Despite positive results … the company opted not to provide explicit guidance for its September quarter," Rakers wrote today in a note to clients. "We do believe this reflects a continued wait-and-see cautiousness with regard to the potential for choppy close rate trends in what remains a tepid enterprise IT spending environment. "

Hammer also said on CommVault's conference call with analysts that it would soon reveal more strategic relationships to go with current partnerships with Dell Inc., Hitachi Data Systems and security vendor McAfee Inc.

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